The Federal Government is moving to phase out crude oil exports as Nigeria ramps up domestic refining capacity and positions itself as a leading African hub for refined petroleum products.

The Chief Executive of the Nigerian Midstream and Downstream Petroleum Regulatory Authority, Rabiu Umar, disclosed this on Monday while speaking at the 49th Nigeria Annual International Conference and Exhibition organised by the Society of Petroleum Engineers Nigeria Council in Lagos.

Umar said Nigeria’s growing refining capacity means the country should increasingly process its crude oil domestically instead of exporting it in its raw form. He noted that the emergence of new private and modular refineries is rapidly transforming Nigeria from a crude oil exporter and importer of refined petroleum products into a regional refining hub.

“The fact that today, we have more refining capacity in Nigeria than we’ve ever had. And, of course, with the projects that are on stream and the expansions that we are also going to witness in the coming years, clearly Nigeria is going to turn into a refining hub for Africa, which means that perhaps every single molecule of our three million barrels a day production that we hope to achieve in the next couple of years will actually be refined locally.

“What that means, and I think this is a monumental shift, is a handshake between the upstream, midstream and downstream. Effectively, it’s not just exporting the raw crude, but making sure that what we actually end up exporting is the refined petroleum products. And I think this is quite substantial,” he stated.

The NMDPRA chief executive said the agency is collaborating with the Nigerian Upstream Petroleum Regulatory Commission to enforce the domestic crude supply obligation, describing it as essential to sustaining Nigeria’s expanding refining industry.

“True resilience requires operational and commercial balance. And we remain steadfast in working with our sister agency, the NUPRC, in enforcing the domestic crude supply obligation. And this is really, really important because if we have enough refining capacity, really we don’t have any reason to be exporting crude oil.

“The more of the refined products we are able to export, the more value we create because, after extraction, we’re also adding value, including in the gas and petrochemical sectors as well,” Umar stated.

He said the transition to domestic refining would enable Nigeria to capture greater value from its petroleum resources by strengthening integration across the upstream, midstream and downstream segments of the oil and gas industry. Umar also identified energy security, gas expansion and regulatory excellence as the NMDPRA’s key priorities.

He said the authority is working to ensure adequate petroleum product stocks are maintained close to key markets to minimise the risk of supply disruptions and cushion consumers against price shocks.

“In addition, we are also working on ensuring that we maintain a certain level of stock in the country at any given point in time. As we’ve seen with the current global crises, we have seen how countries have had to dip into their reserves to make sure that prices don’t escalate.

“So, when we talk about energy security, it’s not just having the products on the coastline, but having the products near markets. In addition to that, we’re also working to make sure that we have stock that will have a protocol of release to make sure that prices remain fairly stable because, of course, as we know, supply and demand drive what we see in terms of pricing,” he added.